PC13

PC13 is the second price control for NI Water, which runs from 1 April 2013 until 31 March 2015. The final price control determination (PC13) sets out our price limits for water and sewerage services for the two years. The determination states that NI Water requires £703 million of revenue for the two-year period. This assessment is based on our benchmarking of the company’s costs and our objective scrutiny of its performance. We have also taken into account the responses we received to our draft determination consultation.

Indications are that NI Water will successfully deliver its first regulatory price control, PC10, covering 2010 to 2013. This will have saved consumers more than £91 million over the three-year period. PC13 challenges NI Water to deliver a saving of £58 million, over the shorter 2013 to 2015 period.

Key benefitsLower charges for consumers – charges will fall by an overall average of 6% below inflation in both 2013-14 and 2014-15.

A more efficient company – for every £1 that comparative water companies in England and Wales spend in operating their businesses, NI Water spends £1.62. We are challenging the company to reduce this 38% operational efficiency gap at a rate of 5% per annum.

Investment in water and sewerage assets – we have allowed for £324 million of prioritised and targeted investment, maintaining the efficiency levels in PC10, to deliver specified infrastructure improvements.

Higher levels of service – an improvement in the overall performance assessment or ‘OPA’ score, moving from 131 at the start of PC10 to 215 by close of PC13. This will narrow the gap to the average water company score of 290.

Following acceptance of our final determination for PC13 we asked NI Water to provide a Monitoring Plan for PC13 . The plan describes the outputs which the company has agreed to deliver in the two years 2013-14 to 2014-15. It outlines the company’s overall strategy and its commitments in three areas of importance to consumers:

• service to consumers,
• drinking water quality and environmental improvements, and
•delivering sustainable services.

Over the next two years, the Utility Regulator will monitor the delivery of these commitments and publish the results in our annual Cost & Performance Report